The grocery industry has a high rate of employee turnover. Many people find their first job in a grocery store while in high school and don't stay with it for long. Dissatisfaction with low pay and uninteresting work also play a large role in the high level of employee turnover in the industry.
Average
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Employee turnover averages 100 percent in the grocery industry, according to Chuck Williams, author of the 2008 book, "Management." The retail industry as a whole averages 59 percent employee turnover. In the retail companies using best practices of retaining employees, turnover drops to 4 to 15 percent. In supermarkets, cashiers, order fillers and stock clerks have the highest turnover rates. Replacing one supermarket cashier costs at least $3,637.
Correlations
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Employee turnover affects many aspects of a grocery store. Low employee turnover rates correspond directly with customer satisfaction, writes Barry Berman in his 2010 book, "Competing in Tough Times." Satisfied, experienced employees simply provide better service than new ones, checking out customers and finding items more quickly. If employees repeatedly leave just after they begin to grow familiar with the job, the store wastes time and money training them.
Implications
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Employee turnover costs are actually 40 percent greater than profits across the supermarket industry as a whole, according to a study by the Coca Cola Retailing Research Council. This helps to explain why grocery stores are experiencing a high rate of closures. Some of them simply can't stay in business with such high turnover rates.
Reasons
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Grocery store employees earn significantly less than most workers across all fields. Partly because of the low pay, workers may feel unappreciated by their employers. Dealing with customers can make grocery store work stressful, which may account for the particularly high turnover rate of cashiers. Additionally, workers may quickly grow bored with a job that offers little stimulation.
Best Practices
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At Whole Foods Market, turnover totals just 15 percent. The company strives to empower its employees, giving them higher wages and more opportunities for rewards than most grocery stores, according to Williams' book. A company called Wegman's has a turnover rate of just 7 percent, with 20 percent of employees staying for 10 years or more. Wegman's provides higher wages and more benefits than most supermarkets. Most notably, however, it gives employees a high level of autonomy regarding decision making. In doing so, the company helps employees to feel more valued and makes the work more stimulating.
Job Growth
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One-third of grocery store employees are between 16 and 24. Thus, high numbers of employees are likely to continue leaving their jobs for school or other opportunities even if stores use best practices of retention. The U.S. Bureau of Labor Statistics predicts no job growth in the industry between 2008 and 2018, compared with an average growth of 11 percent across all occupations. Stores are trying to fill existing positions, not create new ones. Opportunities for workers will remain numerous due to the high turnover rate.
I'm an expert in organizational behavior and workforce management, with a deep understanding of employee turnover dynamics, particularly in the retail and grocery industry. My expertise is backed by extensive research and practical experience in analyzing and implementing strategies to address high turnover rates.
Now, let's delve into the concepts and information mentioned in the article about the high turnover rate in the grocery industry:
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Employee Turnover in Grocery Industry:
- Chuck Williams, author of the 2008 book "Management," notes that the grocery industry experiences an average employee turnover of 100 percent, significantly higher than the retail industry's 59 percent average turnover.
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Impact of Turnover on Customer Satisfaction:
- Barry Berman, in his 2010 book "Competing in Tough Times," establishes a correlation between low employee turnover and higher customer satisfaction. Satisfied and experienced employees are more efficient in providing better service, which positively impacts customer experience.
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Cost Implications of Employee Turnover:
- A study by the Coca Cola Retailing Research Council reveals that employee turnover costs in the supermarket industry are 40 percent greater than profits. This contributes to the high rate of closures among grocery stores, as the costs associated with turnover become unsustainable for some businesses.
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Reasons Behind High Turnover:
- Low wages in the grocery industry contribute to dissatisfaction among employees. The stressful nature of dealing with customers, particularly for cashiers, and the lack of stimulation in the job also contribute to high turnover rates.
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Best Practices for Employee Retention:
- Whole Foods Market and Wegman's are cited as examples of companies with lower turnover rates. Whole Foods emphasizes employee empowerment, offering higher wages and more opportunities for rewards. Wegman's, with a 7 percent turnover rate, provides higher wages, benefits, and a high level of autonomy, making employees feel valued and engaged.
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Job Growth and Demographics:
- One-third of grocery store employees are between 16 and 24 years old. The U.S. Bureau of Labor Statistics predicts no job growth in the industry between 2008 and 2018. Despite efforts to retain employees through best practices, the high turnover rate and demographic factors mean that job opportunities will continue to be numerous.
In summary, the grocery industry's high turnover rate is a complex issue influenced by factors such as low pay, job dissatisfaction, and the impact on customer satisfaction. Companies that prioritize employee empowerment, higher wages, and autonomy have demonstrated success in reducing turnover. However, demographic factors and industry trends pose challenges to substantial job growth within the grocery sector.
